NEW YORK (Forex News Now) – The euro hit a fresh 7-week high against the dollar on Wednesday, as risk appetite picked up as optimism ahead of the earnings season offset persisting fears over Europe’s debt crisis.
In late U.S. currency trading, EUR/USD reached 1.2664, its highest since May 21. The currency pair later retreated slightly to trade at 1.2635, up 0.06 percent on the day.
Earlier Wednesday, money manager State Street Corp. projected second-quarter profits far above market expectations, citing improving revenue trends. The forecast fueled optimism that lifted the Dow Jones Industrial Average 2.82 percent to 10,018, in its largest one-day point gain since May 27.
According to forex analysis, EUR/USD is likely to touch immediate support around Tuesday’s open, 1.2537, and encounter resistance around the high of May 11, 1.2803.
The euro’s earlier losses came after government data showed that German factory orders unexpectedly fell 0.5 percent in May compared with the previous month, as a decline in demand for metals products and fewer big-ticket orders weighed.
Meanwhile, the single currency rose versus the yen: EUR/JPY traded at 110.86, up 0.31 percent on the day.